Hydraulic fracturing, or fracking, has unlocked huge reserves of oil and gas in shale formations in many states. The biggest winner, in terms of new jobs, has been Texas.

But an investigation by Houston Public Media and the Houston Chronicle shows Texas highways have become the nation’s deadliest amid a fracking boom.

Flatbed trucks bearing loads of steel pipe often barrel down these roads. Truck drivers often run into problems when they have to make wide turns onto narrow side streets.

Vilma Marenco was hit by one of those trucks on April 22.

She was driving home when she stopped at an intersection along Old Beaumont Highway, linking East Houston to refineries on the Texas Gulf Coast. She entered the intersection, less than a mile from her house, when an 18-wheeler ran the red light on Old Beaumont, crushing her Chevy Cavalier. Marenco’s husband, Guillermo Gomez, tried desperately to reach her by phone.

“I called her and called her and called her, but she never answered,” he says.

It would be hours before Gomez learned his wife was dead.

The Texas Department of Public Safety says the company involved, R & F Quality Transportation, shouldn’t have had a truck on the road at all. It had racked up a string of safety violations in the months leading up to the crash, ranging from defective brakes to a driver smoking marijuana behind the wheel. When R & F failed to address the problems, state officials ordered it to shut down, an order the carrier ignored. All attempts to reach R & F for comment failed.

The death toll on Texas highways had been falling for decades, as car companies built safer vehicles. But that trend shifted into reverse as the boom in fracking began to heat up.

The Texas Department of Transportation says that between 2009 and 2013, the state’s traffic fatalities rose by eight percent, even as those in most other states continued to fall. And deaths linked to commercial vehicle crashes, like trucks, soared by more than 50 percent over the same period.

The boom has triggered a huge demand for both tractor-trailers and drivers.

“People who’ve never been in the seat of a truck before go to school for two weeks, and they graduate, and now they’re a truck driver, you know,” says Larry Busby, the long-time sheriff of Live Oak County in the Eagle Ford shale region of South Texas. “Well, they’re not a truck driver yet. They’ve just passed the school.”

The Texas Trucking Association, an industry trade group, says the rising death toll has more to do with drivers sharing the road with trucks than with the truckers themselves.

“There is a level of congestion that is rising all over the state, particularly in these areas of smaller counties that involve the oil field and energy exploration, and it’s causing folks that are not accustomed to that type of congestion to make unnecessary risks, and it’s costing lives,” says John Esparza, president of the Texas Trucking Association.

Experts cite fatigue as another factor pushing up traffic fatalities tied to the oil and gas industry. Oilfield workers often work 12-hour shifts, then pile into a company van to drive half an hour or more from their work site to a hotel.

In March 2013, nine Sanjel Corp. employees were returning to their hotel after an overnight shift in West Texas. A pickup truck hit their van, killing three people.

“To put men in a position of being fatigued and to be driving long distance is not something that a company should do, and it shows a disregard for the safety of their employees,” says Alexander Gurevich, an attorney representing the victims’ families.

Sanjel says the van driver has testified that he was not fatigued at the time of the accident.

Texas is struggling to find ways to improve safety on its roads, without disrupting the oil industry on which so many jobs depend. The state’s trucking industry backed a bill, signed by Gov. Rick Perry last year, making it easier for regulators to strip rogue carriers of the permits they need to operate.

But denying permits isn’t always enough. State officials ordered R & F Quality Transportation to cease operations last December, four months before one of its drivers struck and killed Marenco. Gomez, is now raising their daughter alone.

“This has left a great emptiness for my daughter and me,” Gomez says. “The only thing I am asking for is a thorough investigation of all of this and that there be justice.”

Civil courts are often the only source of justice for victims’ families. Few such accidents lead to criminal prosecutions.

New Software – Truckers’ Can’t Get Internet Or Text While Moving

Distributing Company Makes Good Use Of Today’s Technology To Stop Drivers’ Cell Phone Calls And Texts.

A company out of Mechanicville, New York has made the bold step to use new technology to block their truck drivers from making cell phone calls, using the Internet or sending or receiving text messages while they are driving.

The company is DeCrescente Distributing Co., and they have installed a special device in each of their company vehicles that

will make it so that tablets, mobile phones and laptops will not work while their trucks are in use on the road.

The Vice President of Operations, Tom Turcotte, has stated that the “first instinct most anyone has when their phone signals a new text message or phone call is to pick the phone up immediately to answer or check messages.”

His goal is to do what he can to keep his drivers and other drivers out on the road safe with the help of this technology.

Bad Truckers Being Filmed While Texting

The company’s driver supervisor, Jerry Woitkowski has seen that their drivers have adapted well to the new company policy over the past year.

“When we first made the change, they were not completely on board with it, but they know see how it benefits everyone,” he said.

“We knew that they probably wouldn’t be happy at the time the devices were installed, but they are content with the change
now,” he said. “After some time passed, they realized just how frequently text messages and phone calls were interrupting them.”

Woitkowski has also learned that despite being their supervisor, he now has to be patient and wait to hear from his employees while they are driving.

It’s not uncommon for the drivers to be an hour or more away from home base because the company has a distributing area that spans 11 counties and over 7,000-square-miles.

“We now need to be accepting of not having the ability to contact a driver within only seconds,” Woitkowski said. “I have to implement patience on my part.”

“Each of our drivers makes up to 20 stops each day on their routes, which gives them plenty of time to check their messages and return texts and calls during those stop times, rather than dealing with distraction while on the road,” he said.
DeCresente has a contract to use the technology that blocks all calls and Internet use, to stop texting and driving with Cellcontrol, the company that produces it.

The contract allows for a hardware cost of only $70 per each truck, along with a charge of $65 each year for each individual vehicle that uses it.

There is also a model for consumers to purchase at a price of $129, but the consumer model does not have tech support.

U.S.-NAFTA freight totaled $101.1 billion in July 2014 as all five major transportation modes — air, vessel, pipeline, rail, and trucks — carried more U.S.-NAFTA freight than in July 2013, according to the TransBorder Freight Data released today by the U.S. Department of Transportation’s Bureau of Transportation Statistics (BTS).

This is the fifth consecutive month with U.S.-NAFTA freight flows exceeding $100 billion.

Of the $7.9 billion increase in the value of U.S.-NAFTA freight from July 2013, truck freight contributed the most, $4.7 billion, followed by rail, $1.4 billion. The trucking increase was due to growth in truck freight with both Mexico, up $2.5 billion, and Canada, up $2.2 billion.

Trucks carry three-fifths of U.S.-NAFTA freight and are the most heavily utilized mode for moving goods to and from both U.S.-NAFTA partners.

In July, the value of commodities moving by pipeline grew by the largest percentage of any mode, 10.8 percent. Rail freight increased 10.0 percent followed by a truck increase of 8.5 percent, vessel increase of 5.6 percent, and an air increase of 1.2 percent.

Trucks carried 59.2 percent of U.S.-NAFTA freight in July 2014, accounting for $30.5 billion of exports and $29.3 billion of imports.

Rail remained the second largest mode, moving 14.8 percent of all U.S.-NAFTA freight, followed by vessel at 9.1 percent, pipeline at 8.5 percent, and air at 3.4 percent. The surface transportation modes of truck, rail and pipeline carried 82.4 percent of the total U.S.-NAFTA freight flows.

Year-to-year, the percent change in the value of U.S.-Canada freight moved by vessel increased the most of any mode, growing 30.9 percent, followed by a pipeline increase of 10.7 percent. The vessel increase was due to a doubling of export value to Canada while imports by vessel fell 2.6 percent. U.S.-Canada pipeline freight comprised 95.2 percent of total U.S.-NAFTA pipeline freight in July. Freight moved by rail increased by 8.5 percent, truck by 8.0 percent, and air by 2.0 percent.

Trucks carried 52.7 percent of the $55.2 billion of freight to and from Canada, followed by rail at 15.2 percent, pipeline at 14.8 percent, vessel at 6.3 percent and air at 4.0 percent. The surface transportation modes of truck, rail and pipeline carried 82.8 percent of the total U.S.-Canada freight flows.

Year-to-year, the value of rail freight rose 12.0 percent, the largest percentage increase of any U.S.-Mexico mode. Freight moved by pipeline increased 11.4 percent and truck by 8.8 percent, while air and vessel decreased by 0.1 and 5.3 percent respectively. The decrease in vessel freight was principally due to a decline in mineral fuels imports..

Trucks carried 66.9 percent of the $45.9 billion of freight to and from Mexico, followed by rail at 14.2 percent, vessel at 12.6 percent, air at 2.7 percent and pipeline at 0.9 percent. The surface transportation modes of truck, rail and pipeline carried 82.1 percent of the total U.S.-Mexico freight flows.

On Saturday, “pinked out” big rigs will hit the road in support of the Canadian Breast Cancer Foundation as part of the fifth annual Trucking for a Cure event in Woodstock.

Over the past four years, the event has raised over $209,000, with $73,000 being raised last year alone.

Eight-eight transport trucks were part of the convoy last year, travelling from the east TA truck stop on Highway 401 to the Highway 403 exit north on 53 to Towerline Road, then back to Highway 401 and back to the truck stop.

This year, 43 drivers have preregistered for the event.

Joanne Millen-Mackenzie, organizer of Trucking for a Cure, said the event isn’t just for truck drivers or truck enthusiasts. Instead, she wants everyone to come out and show their support.

“The reason I got involved was because my aunt, who had breast cancer and passed away in 2007,” Millen-Mackenzie said. “It was her third battle. You could dare say that she lived a good life with cancer. She made it into her 70s, and in her eyes she was a lot more fortunate than most people.

“It’s my way to constantly remember my aunt,” she added, “and to keep her alive in my memory.”

Millen-Mackenzie said she has experienced her own battle with breast cancer, but because of her aunt she was able to detect it at an early stage and hasn’t had a problem since.

The convoy may also make its way through downtown Woodstock this year, instead of just sticking to the highway.

At an earlier Trucking for a Cure event in September in Prescott, Ont., the convoy went through downtown Prescott and received support from people coming out onto the street to see the trucks.

“It was overwhelming the support from the people on the street,” Millen-Mackenzie said. “Coming out of the stores and waving at the drivers, thanking them, and running out and taking videos of the drivers going by. It was really rewarding for us as well, because it’s a reception we don’t normally see as drivers.”

Millen-Mackenzie also said, that people who have never been to Trucking for a Cure need to see the event to understand it.

“We had the CEO from the Canadian Breast Cancer Foundation, Sandra Palmaro, she came last year and it was her first time and that was our fourth year. And her exact words were, ‘you don’t understand what is going on with this event until you actually come here.’

“You’re overwhelmed with what’s actually going on in one day. We’ve got a barbecue going, we’ve got a silent auction, we’ve got the drivers out there, and a show and shine … it blew her away.”

During the event, truck drivers “pink out” their rides and dress them up for the occasion. Millen-Mackenzie said that as a breast cancer survivor, it brings a tear to her eye every year to watch.

“These are guys that take a lot of pride in their trucks,” she said, “and all the sudden they’re letting their kids climb up on their truck and stick stuff to everything. Pink ribbons and pink flowers. It’s heart warming to watch. These guys just put everything into that day.”

Driver registration for Trucking for a Cure will be starting at 7 a.m. on Saturday at the TA travel centre, just off of Exit 230 at Sweaburd Road in Woodstock.

The event will actually kick off at 8 a.m. with a complimentary breakfast for the drivers before they head off on their convoy at 11:15 a.m.

Live music will start at 11:30 a.m. and go all day, and people who aren’t participating in the convoy can enjoy a barbecue, silent auction, kids zone and draw prizes.

Tommy Walters, hauling lawnmowers to Rhode Island from Maryland with his Boston terrier Daisy riding shotgun, is feeling flush these days after the biggest raise of his 17-year trucking career.

“Under the new pay scale, I’m looking at probably making over $60,000 a year,” Walters, 40, said while waiting for a tire repair in Hagerstown, Maryland. “That’s pretty exciting.”

It’s a big step up from Walters’s usual $48,000 to $55,000, and he’s not alone in an industry where drivers’ wages haven’t kept pace with the national average. Long accustomed to driver shortages, U.S. companies now find themselves fattening up paychecks to retain employees and handle surging freight demand.

U.S. Xpress Enterprises Inc., Walters’s employer, announced a 13-percent average boost in August, more than four times the industry-wide increase last year. It became the shot heard around the trucking business, outpacing Con-way Inc., Indianapolis-based Celadon Group Inc. and other competitors that have also raised pay to keep their trucks rolling.

“You have the early stages of what could be a wage war,” said John Larkin, a Stifel Financial Corp. analyst in Baltimore. “It’s hard for others to stand pat and not take pay up.”

Average driver wages may rise as much as 6 percent in 2014, said Kenny Vieth, president of Columbus, Indiana-based Americas Commercial Transportation Research Co. That would be the second-biggest jump since consulting company National Transportation Institute began an annual driver wage survey in 1994, behind 2005’s 7 percent.

An $840 billion market

Long-haul trucks account for about 38 percent of the $840 billion U.S. freight market, making drivers a crucial link in that economic chain. The driver shortfall now exceeds 214,000, according to FTR Associates data compiled by Bloomberg. The total eclipsed 200,000 in last year’s fourth quarter for the first time since 2004, the data show.

Rising cargo volumes heighten the urgency to fill those vacancies. Freight tonnage rose in six of 2014’s first eight months, according to a seasonally adjusted index from the American Trucking Associations, and is at the highest since the Washington, D.C.-based trade group began tracking the data in 1973.

Closely held U.S. Xpress would add 800 trucks to a 7,000-strong fleet if it could find people to drive them, Chief Operating Officer Eric Fuller said.

“We’re seeing anywhere from 5,000 to 8,000 orders a week that we’re turning down that our current customers are actually offering us,” Fuller said. “We’re turning those down because we don’t have capacity.”

Driver turnover

Annual turnover can run about 90 percent in an industry in which drivers may not get home for weeks. Because many employees’ pay is based on miles traveled, any time lost to breakdowns or waiting for a customer’s cargo means fewer driving hours left on a day’s shift.

Wages rose so slowly since the beginning of last decade that drivers lost ground against other types of workers. Big-rig operators averaged $33,690 in 2001, trailing the average U.S. wage by about 1 percent, according to Bureau of Labor Statistics. In 2013, truckers averaged $40,940 and lagged behind by 13 percent.

“It’s not a driver shortage,” said Vieth, the Indiana-based researcher. “It’s a driver-pay shortage.”

Pay is the biggest consideration in choosing a job, according to a driver survey by North Bergen, New Jersey-based logistics company National Retail Systems Inc. More home time ranked second, and benefits finished third.

Margin pressure

Truckers can’t afford soaring labor expenses, according to the ATA. Operating margins averaged 6.4 percent in the nine-company Bloomberg U.S. Truckload Trucking Index, trailing the 14-percent average for companies in the Standard & Poor’s 500 Index. Companies also say higher salaries aren’t the best way to expand the ranks of potential drivers.

“Pay is important, but I don’t think it’s the driving force in the driver shortage,” said Kevin Burch, an ATA vice chairman who is also president of Dayton, Ohio-based Jet Express Inc., where a lack of employees leaves some trucks sitting idle. “We’re competing for an existing pool of drivers.”

Many drivers who left trucking during the 2007-09 recession haven’t returned, as a U.S. oil and gas boom creates high-paying jobs and the construction industry rebounds.

“The exodus that we’re getting doesn’t compare at all to what we’re bringing into the industry,” Burch said. “It’s hard to get people into it to fill the seats.”

Career option

The ATA is trying to improve the industry’s reputation with a promotional campaign that includes the showcasing of driving as a career option. Besides internal steps such as training dispatchers to be nicer to the drivers they direct, companies are asking shippers for flexibility in pickups and deliveries. The idea is to cut any wasted time after a driver arrives and then has to wait to complete a job, Burch said.

Employers also need to reach younger workers, putting them behind the wheel before they pick another path, Burch said.

Celadon wants to avoid wage competition by hiring more drivers without experience and doing its own instruction, said Chairman Steve Russell. The company runs training schools with free room and board, operates trucks averaging less than 2 years old and sets schedules to get drivers home on weekends.

“If you’re working at a retail outlet and making $9 or $10 an hour, here you have an opportunity to make substantially more as an over-the-road truck driver,” Russell said.

More cargo

Some of the recent raises are taking effect at the start of a holiday shopping season that promises to put more cargo into U.S. trailers. Long-haul trucks carry some of the goods handed off to the biggest package-delivery companies, United Parcel Service Inc. and FedEx Corp., which are boosting temporary hiring ahead of the Christmas rush.

Faster U.S. economic growth could exacerbate the driver shortage, and add to the pressure to increase wages, Stifel’s Larkin said. The U.S. economy is forecast to expand 2.1 percent this year and then accelerate to 3 percent in 2015, according the median of 79 economists’ estimates compiled by Bloomberg.

The shortage “is as bad as it has been and has the potential to be a lot worse,” Larkin said. “There’s not a single person who says, ‘I got this figured out and it’s easy.’”

The industry could use more drivers like Walters. He helps in U.S. Xpress’s worker-retention program and stayed in the business even after his pay plummeted during the recession, forcing him to declare bankruptcy. The Chattanooga, Tennessee-based company treats him like family, he said, and he ignores solicitations from recruiters who will “promise you the moon.”

The timing of his wage increase meshes with his plan to get married in November. He enjoys touring the country while making a living, with Daisy—26 pounds of short, black-and-white fur and upright ears—along for the ride.

“I love being a driver,” Walters said. “It’s a good way to make money.”

The national average price of regular unleaded, now at $3.38 a gallon, is down 8 percent from the end of June. Tom Kloza, chief oil analyst at GasBuddy.com, thinks this year will bring the cheapest autumn gasoline prices since 2010. Last year drivers spent $40 billion at the pump in September, and Kloza thinks that bill will be at least $2 billion lower in 2014. The savings at the pump should help stimulate consumer spending in other parts of the economy.

Gas prices are cheapest in the South and highest in the Northwest. Shale oil being produced in North Dakota and Texas has had an easier time traveling south and east, while fewer trains have headed west, across the Rockies and into Washington and Oregon (though that is starting to change). Still, it’s a big difference. The average gasoline price outside Little Rock, Ark., is $3.05; near Seattle, it’s $3.87.

GasBuddy.com Heat map of gasoline prices

This all starts with the price of oil, which makes up 66 percent of the cost of a gallon of regular gasoline. International crude prices have fallen 16 percent since the end of June, and U.S. prices have dropped more than 11 percent. Different parts of the country use different sources of oil to make gasoline. Most imported blends of light, sweet crude no longer come into the U.S. Gulf Coast, by far the biggest refinery base in the U.S.

Refiners are also getting ready to switch to the winter blend of gasoline, which is cheaper to produce but fetches lower prices. Over the last three years, the price of gasoline from September to November has fallen by an average of more than 30¢ a gallon. If that trend continues in 2014, it could put prices in some parts of the country below $3.

Unexpected events could always shake the oil marked. With the U.S. and its allies planning to step up attacks on ISIS this fall, oil prices could certainly spike by the end of the year. As long as U.S. production keeps rising, however, it should help keep prices in check.

A group of University of Oklahoma students has used data from the National Weather Center to develop a new web-based application that alerts truckers to hazardous weather conditions on the road.

Called Siren, the web application is being tested at three Oklahoma-based commercial trucking companies in about 1,700 trucks, including Oklahoma City-based United Petroleum Transport.

The application grew out of a project that Siren co-founder and CEO Ryan Phillips helped develop at OU’s Center for the Creation of Economic Wealth, an economic development and business accelerator program at the university.

“Weather-related accidents are a huge problem and hopefully we can help prevent some of these and save money and time in the process,” said Phillips, who is earning his master’s degree in computer science at OU.

The application that the students developed has a proprietary algorithm using data on every weather-related accident over the past 40 years to determine which weather conditions are most dangerous, as well as weather forecast data from the National Weather Center in Norman.

Siren uses the data to calculate the risk of an accident based on weather conditions. It also sends weather alerts to truckers’ in-cabin computer systems.

Carl Szmutko, a senior chemical engineering major at OU who serves at Siren’s chief operating officer, said the start-up company has received good feedback already from trucking companies interested in the software. The availability of forecasting data from the National Weather Center also made developing the application easier, he said.

“It was a way to help a massive industry that is suffering significantly from weather-related accidents, and we knew we had the people and we had interest from potential customers,” Szmutko said.

After testing the software with commercial trucking companies in Oklahoma, Siren hopes to formally launch its product in February.

The Siren team developed its web-based application at the University of Oklahoma’s College of Engineering’s Software Studio.

The brain child of Sridhar Radhakrishnan, director of the OU’s School of Computer Science, the software studio is designed to help students explore high-level computer programming, develop computer programs and network with business professionals.

“Software Studio gives students from all areas of study the access and support to bring their big ideas to digital life,” Radhakrishnan said in a statement. “This is not organized by a professor, but rather by groups of students who have the desire to learn and apply computer science.”

if you’re still in the military and wan to enter the world of truck driving once you transition out, consider looking up events like these. While participating or even winning won’t make you a shoe-in for any position, it will certainly help your resume and make you a more attractive candidate.

The course was in preparation for Exercise Black Alligator, an annual exercise that allows U.S. Marines, Royal Marines and Dutch Marines to work side by side and complete multiple mission-based scenarios over close to eight weeks.

The U.S. Marines assisted the British Royal Marines and Dutch Marines in honing their skills behind the wheel of U.S. military vehicles.

Over two weeks, the Marines of 3rd Platoon, with help from Marines from G-4 Motor Transport Section, 1st Marine Division tested more than 150 Royal Marines and Dutch Marines on their operational skills.

While hands-on driving time is needed during the course, training started in the classroom, said Gunnery Sgt. Jorge Careaga, the Licensing Staff Non-Commissioned Officer in Charge for 1st Marine Division.

“The training is conducted in a sort of crawl, walk, run method just like in driver’s education to drive a civilian car,” Careaga said. “You have to start learning the basics in the classroom before you just jump behind the wheel of a car.”

During the classes, the Royal Marines and Dutch Marines learned everything from assembling the vehicles to carry troops, to conducting functions checks for the vehicles.

The environment and location also made the training more challenging for the visiting forces, who were not familiar with the desert environment, explained 2nd Lieutenant Brian Berling, the platoon commander for 3rd platoon.

“Being from England, a lot of these guys have never experienced anything like this,” Berling said. “Being out here in the heat and driving on the opposite side of the road is a completely new experience and it just makes the training they get that much better.”

By teaching the courses for the Royal Marines and Dutch Marines, the course helped the Marines of 3rd Platoon expand their knowledge.

“The Marines from 3rd Platoon did an absolutely fantastic job out here,” Berling said. “I’m really proud of how successful they have been in training their foreign counterparts, but I’m also excited to see them improving in their own ways and having a good time out here.”

Anheuser-Busch is converting its fleet of 66 diesel trucks in Houston to compressed natural gas-powered engines.

This is the first time the beer company has converted an entire fleet, and it is working with Ryder System Inc. to make the switch.

“We are honored that Anheuser-Busch has trusted Ryder as its leasing and maintenance partner to help take this important step toward reducing the environmental impact of their fleet,” Dennis Cooke, president, global fleet management solutions for Ryder, said in a statement.

The conversion will take place as the football season begins, one of the company’s busiest shipping periods. The Houston fleet is expected to ship 17 million cases of beer in the third quarter, according to Ryder.

The new engines are expected to reduce the company’s carbon dioxide emissions by 2,000 tons per year.

The lighter engines are expected to emit 23% less greenhouse gases compared with diesel, the equivalent to taking about 420 passenger vehicles off the road.

“The city of Houston was an early leader in the pursuit of cleaner, greener energy options,” Mayor Annise Parker said in a statement.

“It is encouraging to see one of our major companies taking a major step forward in this area. Cleaner technologies benefit all Houstonians because they help improve the air we breathe,” she added.

Miami-based Ryder System is the parent company of Ryder Supply Chain Solutions, which ranks No. 11 on the Transport Topics Top 100 list of U.S. and Canadian for-hire carriers.

A recent settlement should be a warning to carriers about the contracts they have with customers and about their load-accepting practices, especially for high value cargo: A federal judge in Ohio just awarded a broker $5.9 million for losing a load in a cargo theft.

The U.S. District judge Aug. 26 ruled to award the Ohio-based Excel Inc. the multi-million settlement in its case against Southern Refrigerated Transport, out of Texarkana, Ark.

At issue was a 2008 shipment of pharmaceuticals stolen from a rest stop near Dickson, Tenn., while en route from Exel’s Mechanicsburg, Pa., warehouse to Memphis.

Following the theft of the shipment, Exel filed a claim with SRT on behalf of pharmaceutical maker Sandoz for $8,583,671.12, the alleged actual value of the lost goods. SRT denied the claim.

In court, SRT argued that its liability was limited under the Carmack Amendment to the value on the bill of lading, $56,766.36.

The Carmack Amendment to the Interstate Commerce Act is the federal law governing interstate carriers’ liability for property loss. Based on the bill of lading, a shipper can be confident that the carrier will be liable for any damage that occurs to its shipment. And a carrier can accurately gauge, and insure against, any liability it may face for hauling that load.

But Exel successfully argued that the Carmack Amendment did not preempt the language of the Master Transportation Services Agreement between the broker and the carrier. And, under the MTSA, SRT owed Exel the replacement value for the shipper’s freight.

“It’s an interesting case and hopefully a good reminder to everyone in the marketplace – whether they’re a carrier, a broker or a shipper – that you need to take transportation contracts seriously. Make sure that you understand what you’re agreeing to,” says attorney Marc Blubaugh, Bensech partner and co-chair of the Ohio firm’s transportation and logistics practice group. “They need to be scrupulous about reviewing these contracts, and even some fairly sophisticated attorneys for carriers may not be attuned to the fact that contracting with a broker involves some different considerations than contracting directly with a shipper.”

Another “misapprehension,” and one argued in the case, is that a carrier’s liability is capped by the limits of its insurance, explains Blubaugh.

“In a carrier’s mind, they say the customer should have clearly understood that the maximum exposure was going to be $100,000 or $250,000 because that was the insurance that the carrier promised to have. Why would a carriers want to have an uninsured risk?” he says. “But those are two different issues, and the court here said that’s not going to work.”

SRT parent company Covenant Transportation says it expects to appeal the ruling.